Choice Hotels International Inc (CHH, Financial), one of the world's largest lodging franchisors, reported its third quarter 2023 results on November 7, 2023. The company recorded a 3% increase in total revenues compared to the same period in 2022, reaching a third quarter record of $425.6 million. Despite one-time items affecting net income and diluted EPS, the company still managed to generate a net income of $92.0 million, representing diluted earnings per share (EPS) of $1.81.
Financial Highlights
Excluding reimbursable revenue from franchised and managed properties, total revenues increased 9% to $219.6 million for Q3 2023 compared to the same period of 2022. Adjusted net income, excluding certain items, increased 6% to $92.4 million compared to the same period of 2022, and adjusted diluted EPS increased 17% to $1.82.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q3 2023 grew to $155.9 million, a third quarter record and a 12% increase compared to the same period of 2022. The company also raised its financial guidance for full-year 2023.
Operational Highlights
Choice Hotels reported a 6% increase in its global rooms pipeline as of September 30, 2023, compared to June 30, 2023. The company also expanded its international pipeline, nearly doubling the rooms count from September 30, 2022.
Furthermore, the company executed an average of more than four hotel openings per week, for a total of 159 hotel openings year-to-date through September 30, 2023, a 24% increase compared to the same period of 2022.
Shareholder Returns
During the nine months ended September 30, 2023, the company paid cash dividends of $42.1 million and $54.8 million over the trailing twelve months ended September 30, 2023. The company also repurchased 2.5 million shares of common stock for $306.9 million under its stock repurchase program.
Outlook
Choice Hotels has revised its full-year 2023 outlook, with net income expected to be between $259 and $264 million, adjusted net income between $302 and $308 million, and adjusted EBITDA between $535 and $540 million. The company also expects its adjusted diluted EPS to be between $5.95 and $6.03.
In conclusion, Choice Hotels International Inc (CHH, Financial) demonstrated a strong performance in Q3 2023, with increased revenues, adjusted net income, and adjusted EBITDA. The company's raised financial guidance for full-year 2023 indicates optimism for continued growth.
Explore the complete 8-K earnings release (here) from Choice Hotels International Inc for further details.
